Alongside gas contracted on a longer-term basis to end-users, we estimate that more than one- third of the new gas will be looking to find buyers on the short-term market.” IEEFA was the first to announce that these new market conditions would lead to an LNG supply glut in the second half of this decade. [...] Adapting quickly will be critical for Australian oil and gas companies A key criteria for success is the ability of managers in those companies to recognise decline and to view it as an opportunity, making objective decisions to maximise their returns. [...] Origin Energy for example sold off its interests in the Beetaloo Basin in 2022, and announced “an intention to exit its upstream exploration permits, as the company focuses on its strategy and ambition to lead the energy transition”. [...] The oil and gas industry is already preparing itself for the new environment through its biggest-ever wave of consolidation, as Business Insider reported: “Merger and acquisition activity among exploration and production companies hit $144 billion in the fourth quarter alone and $190 billion for 2023, both setting records.” In Australia, Santos and Woodside also engaged in merger discussions recen. [...] Given the poor performance to date on cost management, and the recent focus on growth, it is likely that new mindsets and capabilities will need to be brought into the existing management teams and boards.
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